Burlington Labs to pay $6.75 million to settle Medicaid false claims case

The State of Vermont, and Burlington Laboratories, Inc. and Burlington Labs, LLC (together “Burlington Labs”), have reached an agreement settling an investigation by the Medicaid Fraud and Residential Abuse Unit of the Office of the Attorney General into whether Burlington submitted false claims or received overpayments from the Vermont Medicaid Program. Burlington Labs will pay $6.75 million to settle potential claims under the Vermont False Claims Act. “This settlement balances the ongoing needs for drug testing services in Vermont with ensuring proper billings for services rendered and safeguarding of state and federal monies,” said Attorney General William H. Sorrell. read more »

U.S. hedge fund files lawsuit accusing Theranos of fraud

A San Francisco-based hedge fund has filed a lawsuit against Theranos Inc, accusing the blood testing company of using fraudulent methods to attract an investment of nearly $100 million, according to an investor letter filed by the fund.

The hedge fund, Partner Fund Management LP, filed the lawsuit in the Delaware Court of Chancery on Monday afternoon, a letter to the hedge fund's investors said.

"Through a series of lies, material misstatements, and omissions, the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company," said the letter, which was reviewed by Reuters.

PFM said in a statement to Reuters that Theranos had "repeatedly lied" about having developed proprietary technologies that worked, and concealed the truth about the commercial viability of its technology and methods. read more »

SEC Announces Enforcement Results for FY 2016

Increase in Actions Involving Investment Advisers, FCPA Violations; Most Ever Whistleblower Money Distributed in a Single Year

The Securities and Exchange Commission today announced that, in fiscal year 2016, it filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers, as the agency continued to enhance its use of data to detect illegal conduct and expedite investigations. read more »

Switzerland, Singapore Target UBS, Falcon Bank in 1MDB Crackdown

Switzerland and Singapore are bearing down on the banks linked to a corruption scandal at 1Malaysia Development Bhd., with the Swiss financial regulator saying enforcement proceedings are underway against UBS Group AG, one of six banks targeted, and the Asian city-state ordering one institution to cease operations and fining others.

Switzerland’s top prosecutor is also considering whether to open a criminal case against the lender that was told to shut down in Singapore, Falcon Private Bank. The Monetary Authority of Singapore fined Falcon S$4.3 million ($3.12 million), UBS S$1.3 million and DBS Group Holdings Ltd. S$1 million for anti-money laundering lapses related to 1MDB.

Malaysian state investment company 1MDB is at the center of several international investigations into alleged corruption and money laundering by public officials. Prosecutors in Singapore, Switzerland and the U.S. and other jurisdictions are looking into a sweeping multiyear scheme in which more than $3.5 billion was allegedly diverted from the investment vehicle. read more »

Flash Boys Might Keep Trade Code Secret as CFTC Mulls Tweaks

The top U.S. derivatives regulator is considering modifying its push for access to computer code after high-speed traders said the effort would be unprecedented and could put the industry’s secret trading formulas at risk.

The requirement, which is part of a broad package of new rules unveiled last November, is one of the measures the Commodity Futures Trading Commission may tweak, Chairman Timothy Massad said during an interview Tuesday with Bloomberg News in Washington. He said the regulator is planning to propose those modifications before the end of the year.

The CFTC is trying to step up oversight of high-frequency traders as so-called flash crashes become more prevalent. read more »

Group Attacks $13.3M Citibank Pact In Jay Peak EB-5 Suit

A group of EB-5 investors whose funds made up a portion of more than $200 million allegedly misused by the owner of Vermont ski resort Jay Peak told a Florida federal court Monday that a $13.3 million settlement with Citibank doesn’t fairly compensate them and should not be approved.

Eighty-nine so-called Phase VII investors who combined to raise $84.5 million for a biomedical facility in Vermont asked the court not to approve the August settlement, which taps a $17 million Citibank collateral account set up using some Phase VII funds to operate the resort. read more »